Canada

Provincial leadership for federal policy

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So convinced are Canada's provinces about the benefits of wind power that they are forging ahead with strong policies to see it developed. But a clear federal energy policy is essential for pulling it all together

The Canadian Wind Energy Association (CanWEA) used its largest conference ever to unveil its proposal to have wind supply 20% of Canada's electricity needs by 2025, equivalent to about 55 GW of installed capacity. But while the utility executives and provincial energy ministers participating in the conference's plenary sessions were refreshingly bullish about the technology's long term potential in their jurisdictions, questions about the short term political will to support wind at the federal level, particularly in today's tough economic climate, permeated the discussions at the association's 24th annual gathering in Vancouver.

"Canada is at a decision point. Wind energy is now big business around the world. With the right strategies, policies and support mechanisms, it can be a big business in Canada too," CanWEA president Robert Hornung told the record 2000 delegates attending the event held from October 19-22. "If we want to capture Canada's wind energy opportunity, now is the time for action. Now is the time to think big."

Hornung used the conference's opening session to lay out the industry's blueprint for that action, building a comprehensive case for a series of policy measures that include putting a price on carbon, prioritising a new "wind friendly" electricity transmission structure, streamlining permitting and approvals processes, providing incentives to equipment manufacturers, and adopting more predictable procurement methods.

The plan, WindVision 2025: Powering Canada's Future, will require a 22-fold increase in Canada's current installed wind capacity, enough to supply about half the new electricity that will be needed over the next 17 years at a total cost of C$132 billion. It is an ambitious target for a country that is "clearly punching below our weight" when it comes to exploiting its wind energy resource, admitted Hornung. But ultimately, argued GE Energy's Seth Dunn, it is a necessary one. "Really, the 20% vision is about keeping up with the global market. It's not just a nice to have. It's probably a need to have if Canada wants to stay within the big leagues for wind," he said. "The rest of the world is not standing still."

Laying the foundation for Canada to compete for investment in that highly competitive global marketplace is only logical, said John Keating of Canadian Hydro Developers, a Calgary company that operates more wind power capacity in Canada than any other. "We must have a complex here in Canada or something. Here we are with the largest land mass, the best wind resources, the best water resources, a hydroelectric base that is complementary to wind sitting next to one of the largest markets in the world," he said. "There is no other country on the globe that has the advantages that we have. All we have to do is have the right policy decisions and the right mindset and be a little more aggressive and get at it."

Long overdue debate

But while Keating's enthusiasm was reflected throughout the conference's multi-track sessions, it also highlighted the significant challenges to making the vision a reality. Getting policy makers focused on what comes down to a long overdue debate about the country's energy future could be one of the biggest, said Marlo Reynolds, executive director of the Pembina Institute, a respected sustainable energy think tank based in Alberta.

"From an energy perspective, the last vision we had in this country was a million barrels per day of oil sands by the year 2020. We accomplished that in 2003 and now we're kind of floating around in a lifeboat wondering where to go next, given an abundance of natural resources of all types," he told delegates.

"We have no real economic or development or environmental or sustainable energy vision at all in this country, so I think the vision that has been articulated by CanWEA is a critical starting point," added Reynolds. "But it has to go beyond CanWEA. For it to be successful, it has to spark a national level discussion about energy and where we're headed, and wrestle with some big, big questions."

What many in the industry fear is that, on a federal level, the government could falter on the first step. Ottawa's ecoEnergy for Renewable Power program (ERP), which pays a C$0.01/kWh production incentive for the first ten years of a wind project's life, is scheduled to run until the end of March 2011. But Jimmy Royer of Natural Resources Canada, the federal department that administers ERP, told delegates that if allocations continue at their current pace, the program would use up all of its funds by early next year.

The industry is pushing for a C$2.8 billion expansion and for developers such as GDF Suez, said the company's Jeff Jenner, it is critical that the Conservative government signal its intentions soon. "As long as that policy is still nebulous it will be hard to justify large investments in Canada," he told delegates. "As long as there is political uncertainty as to policy, the investments will dry up quickly and they will migrate around the world to other jurisdictions where the policy is sound."

Steven Guilbeault of Équiterre, a Quebec-based environmental organisation, doubts clarity is coming in the 2009 federal budget. "What I'm hearing in Ottawa is that the money that could have been earmarked for replenishment funds for wind are probably going to go to carbon capture and storage."

Competing with CCS

One thing the wind industry does have going for it is political pragmatism. If the federal government focuses its energy and climate strategy on capturing and storing carbon, the main beneficiary is going to be the province of Alberta, which not only has a coal-heavy electricity system, but is also grappling with skyrocketing emissions from oil sands development. That is not likely to sit well with the other provinces, especially those where Prime Minister Stephen Harper, who failed yet again in Canada's October 14 federal election to secure a majority of seats in parliament, needs to make electoral gains.

"If the funds for wind development dry up federally, and the provinces of Quebec and Ontario want to continue developing wind but all the federal money, speaking in term of energy, would go to Alberta, that could create a situation where provinces start demanding their share," said Guilbeault.

ProvincES show the way

In fact, he added, it is at the provincial level where leadership on renewable energy is really starting to emerge. "In Quebec, there is a discussion now about new development in the north, which would include a lot of things like mining and tourism, but also a fairly large wind development. There are numbers around 10,000 or 12,000 MW. And it's not the industry, it's not the promoters, it's the Quebec government that is talking about it."

But Quebec is not the only example. Prince Edward Island's George Webster used the conference to layout his government's plan to install 500 MW of wind by 2013 in a province where the current average load is only 160 MW. Ontario's George Smitherman told delegates in a video address that he has sent system planners back to the drawing board to find ways to add more renewable energy to the province's supply mix more quickly. British Columbia's Richard Neufeld called wind power "an important part" of his government's goal of energy self-sufficiency by 2016. New Brunswick energy minister Jack Keir told delegates the conference is building a strategy around a study that found it is economically feasible to develop 3000-4000 MW of wind power in his province and 5500-7500 MW in New Brunswick, Nova Scotia and Prince Edward Island combined. "And folks, even if they are half right, I would take that in a heart beat," he told delegates.

Getting to those kinds of numbers in a region where the current total capacity from all sources of generation is just shy of 6800 MW is going to take a collaborative effort that pulls in utilities and policymakers from across eastern Canada and the north-eastern United States to deal with issues such as load balancing, purchase prices, market rules and transmission planning, said the New Brunswick System Operator's Jean Finn. "I think what is exciting about wind is that it is an opportunity. There is so much benefit to it that it's worth the trouble to try to see if we can change the way systems have traditionally been operated."

It is a tall order made more complex by the desire of many US jurisdictions to meet their renewable energy mandates from within state boundaries. It is an issue that GDF Suez has already had to confront. It is completing a 99 MW wind farm in Prince Edward Island and is sending most of the output across the border to markets in New England. "I know US jurisdictions are now invoking policies to prevent the importing of renewable energy. They want the development to be done at home, even though they don't have a stellar track record for developing renewable energy, or any energy for that matter," Jenner told delegates. "If one of our policy planks is this idea that we are going to export a lot of renewable energy, then we need to fight policies that would thwart that. Certainly we at Suez have been doing that, but we are kind of the lone voice."

With exports at the heart of any strategy for the large scale development of wind in the Maritime Provinces, it is a fight that Keir, at least, seems ready to take on. "We cannot be worried anymore about protecting our own little slice of the pie. What we all have to look at is the bigger global picture and grow the whole pie," he told delegates.

Traditional power systems are poised to change in other ways too, said BC Hydro CEO Bob Elton. If wind producers focus on doing "a superb job" of delivering their product and working closely with grid operators on integration issues "you will get all the growth you want and more." With its 20% vision, he said, the wind power sector is setting itself up to be an important but not overwhelming part of any system.

"Even though it's a lot, it is still only 20%," he told delegates. "We're all going to be dealing with variations of smart grids, we're all going to be thinking about things like people plugging a car into the grid and taking and giving back power. There is going to be a lot more distributed generation. We're all facing big challenges in terms of how we integrate all kinds of things in the next 20-30 years. So to have a wind industry that's very good at collaboration, that sees itself as playing a part, but not a dominant part, is a very positive thing."